Following last week’s dispute over haulage permits between Poland and Russia, transport companies and logistics providers are having to search for alternative ways to deliver vehicles and automotive parts to Russia from Europe. However, those alternatives, which include short-sea options, is going to be costly for some logistics providers.
"Instead of driving through Poland, we can use the Klaipeda ferry [in Lithuania], there is also a ferry from St. Petersburg, as well as through Finland,” said Alexandr Larionov, head of Russian transport provider, LarTrans. “Of course, the transport cost will be higher but we have to estimate everything. After all, for example, if you take the overland route through Germany, the fee should also include the toll roads, permits and fuel. Therefore, the ferry costs may turn out to be not as high".
According to Eugene Moskvishev, head of the Russian Association of International Automotive Carriers, there is no way to bypass Poland by land when delivering cars and components to Russia from Europe; the only option is by ferry. “We are thinking about how we can send cargo by sea," said Moskvishev. He added that after the closure of traffic through Ukraine, almost all of the deliveries from Europe to Russia went via Poland and the volume of transit now considerably exceeds the volume of trade between the two countries.
Factoring in a multimodal alternative that includes short-sea shipment by ferry can increase the cost considerably, according to the CEO of Russian Transport Lines, Konstantin Skovoroda.
“Transporters will now have to make the part of the journey by ferry and this will increase the overall cost of the delivery from €600-€1,000 ($673-$1,120) per single,” he estimated.
According to Skovroda the average cost of moving vehicles from central Russia, where most assembly lines are located, and back is estimated at anything between €2,000-€4,000. Given the tough situation in the Russian market at the moment this would be too expensive for most market players.
Vladimir Tian, head of the Russian carrier Sovtransavto, agrees. At the same time, he said that the current situation may be of benefit for Belarusian carriers and logistics provides.
"Baltic transport companies are likely to receive a limited number of permits, so the Belarusians will for some time monopolise the market and probably raise rates," he explained. “The price increase will depend on how long Russia and Poland remain unable to find a compromise.”
According Russian analyst agency, Autostat, last year Russia reduced the annual import of cars by twice to 350,000 units, so the permit impasse will have less of an impact on the import of finished vehicles than it would have had previously. However, the level of localisation at Russian assembly lines is still below 50%, so most of them are importing components from Europe.
So far, foreign carmakers making vehicles in Russia have refrained to comment on the situation.
The latest situation between Poland and Russia has similar consequences to the one between Turkey and Russia following the shooting down of the Russian Su-24M fighter jet over Syria by the Turkish airforce in December last year.
According to the Turkish Exporters’ Association, the total value of exports of vehicles and automotive components to Russia amounted to $800m in 2014, with components accounting for $440m of that amount. That figure is expected to fall dramatically this year.